Islamic Banking

Islamic Banking can be described as a system through which finance is provided in the form of money in return for either equity or rights to share in future business profits, or in the form of goods and services delivered in return for a commitment to repay their value at a future date. It follows the Sharia’a, called Fiqh Muamalat (Islamic rules on transactions). The rules and practices of Fiqh Muamalat came from the Quran and the Sunnah, other secondary sources of Islamic law such as opinions collectively agreed among Sharia’a Scholars (Ijma’a), analogy (Qiyas) and personal reasoning (Ijtihad). As such, Islamic Banking prohibits the payment or acceptance of interest for the lending and accepting of money, as well as carrying out trade and other activities that provide goods or services considered contrary to its principles.